The amalgamation of ComputerCorp, S Central and Synergy Plus is just a sign of more consolidation to come, several industry representatives claim. The newly combined group last week announced ComputerCorp CEO, Robin Rindel, had bowed out in favour of S Central managing director, Peter Mavridis. In a statement, the companies said switching management from WA to the east coast reflected the changing dynamic of its business operations. Once completed, over 80 per cent of the combined group’s revenues will derive from outside WA.
Mavridis said his appointment was part of a new highgrowth strategy being taken by the combined group. The trio first announced plans to join forces in April. “Robin has done a great job in cost control. We’re now moving to a growth model, which has been my focus,” he said. The group has also opted to re-brand under Synergy Plus.
The decision to unite has raised questions about whether the industry will see more channel organisations either leave the market, or buddy up. Several integrators pointed out consolidation was an inevitable result of the economic downturn.
Managing director of ASX-listed Data#3, John Grant, said the amount of consolidation depended on how tough the market remained over the next half. He said those in the commodity space - without annuity revenue or significant services practices - were facing the biggest challenges.
“I think it will get tougher before it gets better. There are many in the reseller community who are financially strained, their purchasing capabilities have got tighter and they don’t have the depth of resources to withstand the downturn. This does drive consolidation,” he said. “It’s the fundamentals of business and the financial imperatives that will drive consolidation. Many organisations could continue to be sustainable, but there are so many that are only a month away from being in serious financial trouble. Vendor have resellers in various levels of distress.”